Imagine a biz where everyday Internet users were your focus group—and financiers! By Scott Steinberg Having personally published books, games, magazines, and more, trust me: There’s nothing cheap, or certain, about creating a new product or service. Thankfully, for today’s entrepreneur there’s no need to bet the farm building a better widget or to waste years designing the next Betamax. To find, fund, and have a field day with tomorrow’s million-dollar idea, all you need to do is ask potential customers. Crazy? Au contraire. Spending millions of up-front dollars on research and development, then manufacturing thousands of vibrating dumbbells and praying that they’ll catch the public’s fancy—that’s the insane approach. Instead, through the magic of crowdsourcing—requesting feedback or recruiting helping hands from large groups of people through open calls for assistance—you can gauge demand for and create bankable products from day one. Because we’re partners, let’s call our new venture What People Want—it’s short, sweet, and gets the basic idea across. (Plus, the jocks and daytime soap stars endorsing products on our inevitable late-night-TV infomercials won’t have trouble remembering the name.) From handbags to helmets, tell us what to make, pre-order enough items, and we’ll build it on demand. Already available services like Kickstarter.com—which let you petition everyday Internet users to finance projects like record albums, high-tech gadgets, and boutique fashion lines—have the right idea. Creators simply submit to Kickstarter a description of their project, including photos, videos, or audio samples. Then they set a desired funding level and deadline for financing. Kickstarter users are asked to pledge specific dollar amounts and are offered special rewards related to each project for contributing. (Ex. Donate $50 to get an indie comic book published and you’ll receive a signed copy; pledge $500 and the creator might put your name in the credits.) If financial goals are met, donations are processed and rewards are distributed. If promissory funding comes up short, nothing is exchanged. Succeed or fail, the creator of the idea not only retains all rights to his project, but he has also initiated buzz for it and opened pathways to potential backers and fans. Consider the recent book-to-film adaptation Blue Like Jazz, an independently financed production that was suspended for lack of funding. When Jonathan Frazier and Zach Prichard, fans of the Donald Miller memoir upon which the film is based, heard about the work stoppage, they consulted with the movie’s creative team and turned to Kickstarter. Within 10 days of its initial Kickstarter posting, the project had raised the $125,000 needed to resume production. Contributions continue to pour in. To date, nearly 4,500 people have invested, on average, a staggering $76 per person. In this instance, financiers were rewarded with everything from a thank-you call from the director to a personal home-visit and book reading by the author himself. Even carmakers are dabbling in the entrepreneurial application of crowdsourcing, using reality as the ultimate focus group and building viable businesses before finished products even exist. Take, for example, the doings at Local Motors (local-motors.com). Its autos are conceived by average Joes, whose designs are reviewed and voted on by other drivers. Highly rated concepts are moved into production at specially built regional micro-factories. Local Motors provides tools, training, and assistance; customers (everyday DIY types) assemble the vehicles themselves over a couple of weekends. Hobbyists are even encouraged to add or modify original parts, which can afterward be sold to fellow enthusiasts. Local Motor’s first open-source car, its $50,000 Rally Fighter—an off-road monster that looks like a Mad Max film prop—needs sales of only 250 units to meet the company’s mandatory break-even point. The current tally: 112. Other manufacturers are experimenting with similar on-demand business models: Threadless, an online T-shirt retailer, sets its production agenda based on the direct feedback of its users. And StyleFactory, a furniture vendor, lets customers vote on which accessories get manufactured. Crowdsourcing lets us recognize the vision General Electric once championed: It “brings good things to life.” Or well-liked things, at the very least. Ventures like Kickstarter and Local Motors are compelling, but they only allow generous donors to play patron to the arts or gifted grease monkeys to satisfy their wildest creative automotive urges. You and I know there’s money to be made with What People Want (WPW) by going big and executing at a world-class level. The trick is coming up with innovative ideas that appeal to a wide range of people, and weeding out the winners from tomorrow’s clearance markdowns. Well, that, and begging people for lots of spare change. Picture us as the world’s most democratic incubator of great ideas, or an objective talent agency. Someone’s got to keep creative ideas within reason, so we’ll employ a small team of specialists—artists, engineers, industrial designers, etc.—to come up with a range of top-notch, professionally designed products, and create just enough samples, documents, and drawings to get the message across. Once mock-ups or prototypes are built at minimal cost and base production budgets are decided, we’ll present them to the world through our website. This online hub acts as both product showroom and public forum. We propose the potential next bestselling bands, brands, and accessories. By preordering enough units of each item, from CDs to sonic toothbrushes, the consumer ultimately decides what gets built.
WPW aims to make its mark through focus and rapid response, to distinguish itself as a dedicated mass-market business with a custom-engineered, -designed, and -marketed portfolio of products determined by swiftly changing consumer tastes. Shoppers crying out for a new style of sundress just made popular on America’s Next Top Model or a breed of solar-powered backpack perfect for short morning hikes? We can quickly create any number of concepts that fit the bill. Got a product idea of your own? Work up the concept, post it on our site, and if the community votes it up the charts, we’ll put a cost on it. If enough people buy in, congratulations—we’re in business together. Whoever supplies the initial specs acts as de facto creative director, helping shape everything we touch. Under current business models, even the sharpest executives can only make educated guesses as to what consumers will buy and how much of it. By flipping the script and letting the consumer fund only the ideas they like best, we’ll know exactly what to create and to what extent. That lets us focus more on development rather than marketing, so we can deliver a high-quality product with the range of features people desire—and one that sells itself in just the right quantities. An added benefit is that buyers who preorder will feel like a welcome and vital part of the process. As incentive for helping us shoulder up-front costs, our consumer-financiers will get access to our wares before the general public, and at discounts, plus rewards. (Options run the gamut from collectibles to invites to special events.) We own the end-product, minus any royalties due to community contributors who’ve submitted original designs. Profits from every sale help keep the lights on and new ideas coming. Picture it. Minimal risk. Even less commitment. No need to spend millions warehousing crates of unsold goods or attempting to inflate consumer demand. Just a small core team and talented crew of freelancers keeping overhead low and profits high, and securing materials and services only as needed. Bad ideas hit the cutting room floor. Good ideas ship with a ready-made audience. Products launch at just the right size and scope to meet market needs. Customers are happy. Employees enjoy job security. All get the pleasure of bringing great ideas to life. Sequels and revisions can be built to incorporate buyers’ feedback. Even crappy concepts generate helpful response and criticism that can be worked into future products. And hey, if we can’t get a project off the ground, no harm, no foul—no one personally shoulders the blame. It makes you wonder: Could we have avoided the dot-com crash just by asking people first if they’d spend billions buying kitty litter from talking sock puppets? There’s no guarantee every one of our projects will be brilliantly realized. But Darwinism plays in WPW’s favor. Faceless corporate giants can afford to churn out mediocre products and recoup costs, thanks to the vast number of shoppers they reach. Because public trust is crucial to securing crowdsourced investments, only dependable performers will continue to prosper. To succeed, we’ll need to routinely deliver goods on time and on budget, and make customer satisfaction paramount. That builds a culture of performance, practicality, and attention to detail—all hallmarks of the world’s largest, most successful corporations. The key difference: By being smaller and scrappier, we enjoy a more direct line to our customers and can turn on a dime as market trends shift. No Procter & Gamble or Samsung, with their reams of red tape and massive bottom lines, can hope to match our responsiveness. No matter how unique the idea, we can dress it for success, pitch the world in seconds, build it at manageable cost, and bring it to market in a flash. Think a talking lunchbox is the next Webkinz? You can have it in your hands in less time than it takes the creative thinkers at big corporations to schedule a meeting with upper management. Make no mistake: Creating the 21st century’s most advanced toaster or ultimate airbed won’t be a cakewalk. But What People Want makes it easier by removing most of the initial guesswork from the equation. As a What People Want investor, you’ll even get to pick your very own title. Chairman of the board? Chief technology officer? Nothing’s too good for our star benefactors. As for company business cards? Hey, that’s no problem either, assuming, that is, you’re willing to pledge a little extra. Scott Steinberg is head of the high-tech consulting firm TechSavvy Global.
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